Aliko Dangote, President of Dangote Industries Limited, has clarified that the recent reduction in the ex-depot price of Premium Motor Spirit (PMS), commonly known as petrol, at the Dangote refinery was driven by market dynamics. Speaking during an interview featured in an Arise TV documentary, Dangote emphasized the need to safeguard the multibillion-dollar investment while addressing economic concerns.
Price Reduction and Market Competition
On December 19, 2024, Dangote’s refinery reduced its ex-depot petrol price from ₦970 to ₦899.50 per litre. This move intensified competition in Nigeria’s downstream sector, prompting the Nigerian National Petroleum Company Limited (NNPCL) to lower its ex-depot price to ₦899 per litre.
The refinery also announced a partnership with MRS petrol stations to retail PMS at ₦935 per litre nationwide, sparking widespread approval from Nigerians.
Dangote explained, “The price reduction is a response to the market. It is a refinery where we invested over $20bn, and I think we have to try and protect our interests and investments.”
Impact of the Dangote Refinery
Highlighting the economic impact of the refinery, which has a 650,000 barrels-per-day capacity, Dangote underscored its potential to transform Nigeria’s oil sector and reduce reliance on imported petroleum products. He noted that importing petroleum creates significant pressure on foreign exchange reserves.
“Forty percent of our demand on foreign exchange is due to petroleum imports. Allowing imports to continue drains foreign exchange because most letters of credit for these products send money out of the country without benefiting Nigeria directly,” he said.
Patriotism and Legacy
Dangote reiterated his commitment to leaving a lasting legacy through the refinery project, describing it as a patriotic endeavor.
“In the history of Nigeria, in the last 100 years, nobody has put $20bn into any project. If I had invested this money in Google or Apple, my returns would have been much higher, and I wouldn’t have the challenges I face today. But patriotism and my love for Nigeria motivated me to do this,” he stated.
Dangote dismissed claims that the Nigerian National Petroleum Company (NNPC) provided financial assistance to resolve liquidity issues, labeling such rumors as “cheeky and nasty.” He clarified that NNPC’s $1bn investment was minimal compared to the refinery’s $20bn value.
Operational Status and Future Plans
Devakumar Edwin, Vice President of Dangote Industries Ltd., revealed that the refinery is currently processing 350,000 barrels of crude oil per day, with plans to ramp up to its full capacity of 650,000 barrels. Edwin added that the refinery’s operations are supported entirely by Nigerian crude oil, which exceeds the refinery’s needs.
“The full capacity is 650,000 barrels per day; we are now operating at 350,000 because the idea is to stabilize production. Once fully operational, the refinery will generate substantial revenue,” Edwin said.
Challenges with NNPC Partnership
Dangote also elaborated on challenges with NNPC’s involvement in the project. He explained that an agreement to pay Dangote Industries $1bn was altered after NNPC opted to pay in cash rather than through crude deductions. When NNPC later backed out of the arrangement, Dangote Industries proceeded independently to complete the refinery.
“We walked away from the deal and still finished our refinery. It is operating, and we are moving forward,” Dangote said, dismissing allegations of liquidity crises as baseless.
Transforming Nigeria’s Oil Sector
The Dangote refinery is poised to revolutionize Nigeria’s oil sector, reducing reliance on imports, stabilizing fuel prices, and strengthening the economy. Despite criticisms and challenges, Dangote remains steadfast in his vision to create jobs and drive economic growth.
“This project is about creating opportunities and ensuring Nigeria’s future stability. Wealthy people create work for others, not just accumulate cash,” Dangote emphasized.
As the refinery continues to expand its operations, it is expected to play a pivotal role in transforming Nigeria’s energy landscape and reducing its dependency on imported petroleum products.
